But the group will attempt to convince buyers that full-year ebitda will be in the
region of £50m if other factors such as the growth in the business, bingo duty
reduction and downward movement in rents are taken into account.
It will also sweeten the offer by tempting buyers into a partnership deal with the
online bingo business, which Gala Coral is retaining.
One analyst said a valuation at six times ebitda was a “bit high” for the bingo
business. “The duty cut will benefit the bottom line, but any buyer will have to invest
in the estate,” the analyst said.
Insiders say the bingo division will be retained if bids fail to match expectations. But
Gala Coral’s owners, among them hedge funds Apollo, Cerberus, Park Square and
York Capital Management, who took over following a 2010 debt restructuring, are
seeking an exit.
They have been gradually dismantling the one-time betting, bingo and casino
powerhouse, selling its 19 casinos to rival Rank Group for £179m last year. A
flotation has long been mooted, though an insider said any decision on that was at
least 12 months away.
The group is now focusing on the Coral betting business, whose division is run by
former HBOS chief executive Andy Hornby.
In the quarter to April 12, the betting business increased turnover by 8 per cent to
£302.2m, reporting ebitda of £62.7m.
Gala Coral declined to comment.